This module allows you to analyze existing cross correlation between Ford Motor Company and SPTSX Comp. You can compare the effects of market volatilities on Ford Motor and SPTSX Comp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ford Motor with a short position of SPTSX Comp. See also your portfolio center. Please also check ongoing floating volatility patterns of Ford Motor and SPTSX Comp.
|Horizon||30 Days Login to change|
Predicted Return Density
Ford Motor Company vs. SPTSX Comp
Taking into account the 30 trading days horizon, Ford Motor Company is expected to generate 2.52 times more return on investment than SPTSX Comp. However, Ford Motor is 2.52 times more volatile than SPTSX Comp. It trades about 0.05 of its potential returns per unit of risk. SPTSX Comp is currently generating about 0.03 per unit of risk. If you would invest 1,028 in Ford Motor Company on June 17, 2019 and sell it today you would earn a total of 23.00 from holding Ford Motor Company or generate 2.24% return on investment over 30 days.
Pair Corralation between Ford Motor and SPTSX Comp
|Time Period||2 Months [change]|
Diversification Opportunities for Ford Motor and SPTSX Comp
Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor Company and SPTSX Comp in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on SPTSX Comp and Ford Motor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ford Motor Company are associated (or correlated) with SPTSX Comp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPTSX Comp has no effect on the direction of Ford Motor i.e. Ford Motor and SPTSX Comp go up and down completely randomly.
See also your portfolio center. Please also try Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.